So this thread is not about investing in this stock or that stock. Stocks are volatile and subject to extreme price swings at any given time. It is not wise to invest too much money in stocks. This thread is what I am doing right now and I am on a path to make a small fortune by the time I've retired. The gist of this method is investing in index funds into an IRA account. Compound interest will make your contribution rise exponentially. Also, I am not allowed to post URL's yet since my account is not old enough. Apparently 3 months being a member is not old enough. Just remove the dashes in the coded link and it will bring up the page. So I apologize beforehand. 1. IRA's There are two types of IRA's - traditional IRA and Roth IRA. The basic difference is that traditional IRA contributions are tax deductible - meaning that it is deducted from taxable income. At withdrawal, you must pay income tax on contributions AND earnings. With a Roth IRA, contributions are taxed. However, at withdrawal nothing is taxed generally. The catch to both of them is that you must be 60 years old to withdraw, or both will be subject to penalties. 2. Investment An index fund is a mutual fund that mirrors an entire market. For example, an S&P index fund will invest in all the individual securities in the S&P fund and just leave it. This is called a passive mutual fund because no one is touching it, the market moves the price, not people. Since there aren't expensive portfolio managers managing these funds, expense fees are extremely low. Not only are expense fees low, but it has been proven that the stock market has a steady growth of 9%. Code: h-ttp://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html As you can see, the S&P had a return rate of 9%, even with the 2008 recession. Therefore, low expense fee coupled with high, steady growth is the perfect recipe for COMPOUND INTEREST. 3. Compounded Growth Lets say you are age 22, fresh out of college and a new job. You have so much money, you just decide to stash it into a savings account with maybe 2% interest. 2% interest isn't going to do shit for you. Make an IRA and invest in an index fund. So you have $10,000 in the savings account and make an IRA. You buy the fund and contribute $300 monthly to it. Retirement age is 65, so you have 43 years to contribute. At 9% "interest", you will make: $2,336,629.32 That is a shit load of money. $2 million dollars! That, my friends, is the magic of the stock market. Even in times of depression you will have a positive rate of return. Use this website and play around with the numbers and you will get the gist of it Code: ww-w.moneychimp.com/calculator/compound_interest_calculator.htm Put compound interest annually at 12, since you are contributing monthly. Interest rate is 9%, since that is rate of return of S&P 500. I hope you enjoyed this guide my friends, let this be an outline of your retirement plan.